8 May 2013

Blog post: Perception is bitcoin’s biggest battle

Along with the general media attention bitcoin has attracted in recent months, there’s been much talk about whether bitcoin is merely a tool for financial speculation … or is a currency as real as any other, capable of being used to buy and sell goods, as well as for investment purposes.The media frenzy accompanying the bitcoin roller-coaster of late has resulted in a surge of demand. Transaction volumes are steadily increasing and more online outlets now accept bitcoin payments. Consequently, players in the bitcoin ecosystem have fared well: With $120 million (US) in trading volumes in March 2013 (as reported by Mt.Gox, the largest bitcoin exchange) and a trade commission of 0.6 percent, this equates to revenues of around $1 million per month.With low operating costs, that means substantial profits. This has led some to speculate that the bitcoin marketplace could create billion-dollar businesses. Even if this might be exaggerated, bitcoin – and bitcoin exchanges in particular – could in fact become attractive investments for venture capital firms at some point.